隆华科技(300263) - 2021 Q4 - 年度财报

Important Notice, Table of Contents, and Definitions This section provides crucial disclaimers, outlines the report structure, and defines key terms for clarity Important Notice The Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of this annual report, free from misrepresentation or material omissions 2021 Annual Profit Distribution Plan | Distribution Basis | Distribution Plan | | :--- | :--- | | 904,221,263 shares after share repurchase | Cash dividend of CNY 0.35 per 10 shares (including tax), no bonus shares, no capital reserve conversion to share capital | - The company's responsible person, chief accountant, and head of accounting department all guarantee the truthfulness, accuracy, and completeness of the financial report in the annual report[5] Definitions This chapter defines key terms and abbreviations used in the report, including company entities, subsidiaries, major clients, and regulatory bodies - The reporting period is defined as January 1, 2021, to December 31, 2021[15] Company Profile and Key Financial Indicators This section presents the company's fundamental information and a summary of its key financial performance metrics for the reporting period Company Basic Information This chapter provides basic information about Longhua Technology Group (Luoyang) Co., Ltd., including its stock ticker, code, legal representative, and contact details Company Basic Information | Item | Content | | :--- | :--- | | Stock Abbreviation | Longhua Technology | | Stock Code | 300263 | | Legal Representative | Li Zhanming | | Registered Address | Luoyang Airport Industrial Cluster Area | | Email | lylhzqb@126.com | Key Accounting Data and Financial Indicators In 2021, the company achieved steady growth with revenue increasing by 21.10% to CNY 2.209 billion and net profit attributable to shareholders rising by 30.88% to CNY 290.89 million, despite a significant 89.46% decrease in net cash flow from operating activities 2021 Key Financial Indicators | Indicator | 2021 | 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 2,209,074,850.35 | 1,824,187,516.39 | 21.10% | | Net Profit Attributable to Listed Company Shareholders (CNY) | 290,894,734.78 | 222,255,290.14 | 30.88% | | Net Cash Flow from Operating Activities (CNY) | 23,516,229.43 | 223,153,080.66 | -89.46% | | Basic Earnings Per Share (CNY/share) | 0.32 | 0.25 | 28.00% | | Weighted Average Return on Net Assets | 10.32% | 7.97% | Increase of 2.35 percentage points | | Total Assets (CNY) | 6,288,325,043.23 | 5,264,425,048.25 | 19.45% | 2021 Quarterly Key Financial Indicators (Unit: CNY) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 382,562,748.87 | 567,134,164.38 | 574,227,194.21 | 685,150,742.89 | | Net Profit Attributable to Listed Company Shareholders | 55,143,694.17 | 61,879,903.77 | 85,762,922.05 | 88,108,214.79 | | Net Cash Flow from Operating Activities | -89,349,979.71 | 22,388,919.46 | -17,624,562.34 | 108,101,852.02 | Non-Recurring Gains and Losses and Amounts In 2021, the company's non-recurring gains and losses totaled CNY 57.36 million, a significant increase from CNY 32.68 million in 2020, primarily driven by fair value changes from financial assets and government subsidies 2021 Key Non-Recurring Gains and Losses (Unit: CNY) | Item | 2021 Amount | 2020 Amount | | :--- | :--- | :--- | | Disposal gains/losses on non-current assets | -5,861,259.35 | -2,251,762.28 | | Government subsidies recognized in current profit/loss | 28,892,176.46 | 19,299,661.29 | | Fair value changes from trading financial assets, etc. | 50,075,263.33 | 4,125,580.43 | | Total | 57,357,361.12 | 32,680,538.73 | Management Discussion and Analysis This section provides a comprehensive review of the company's operations, financial performance, and future outlook, including industry analysis, core competencies, and risk factors Industry and Business Overview The company has established a synergistic industrial structure across electronic new materials, polymer composite materials, and energy conservation & environmental protection, benefiting from strong market demand and domestic substitution trends - The company's industrial layout is well-established, forming three major business segments: electronic new materials, polymer composite materials, and energy conservation & environmental protection, creating a diversified, synergistic, and sustainable industrial structure[41] - Electronic New Materials: The company has achieved technological breakthroughs in high-purity Mo targets and ITO targets, possessing industrial advantages and gradually reversing the long-standing reliance on imported sputtering targets[44][66][67] - Polymer Composite Materials: Products are applied in wind power, aerospace, shipbuilding, and rail transit, with downstream industry development driving the market into a period of rapid growth[47][71] - Energy Conservation & Environmental Protection: The company is a leading enterprise in industrial heat exchange and energy-saving equipment, with strong overall competitiveness, while the trillion-yuan wastewater treatment market offers broad development prospects[74][75] Main Businesses and Products The company's main businesses are divided into three segments: electronic new materials, polymer composite materials, and energy conservation & environmental protection, serving diverse industrial applications Electronic New Materials Main Products and Uses | Company | Product | Main Uses | | :--- | :--- | :--- | | Sifang Electronic | Molybdenum targets, Copper targets, Titanium targets | TFT-LCD/AMOLED, semiconductor IC manufacturing, display panel electrode and wire preparation | | Jinglian Optoelectronics | ITO targets | TFT-LCD/AMOLED devices, HIT photovoltaic devices, and other TCO film preparation | | Fenglianke | Target bonding | Target bonding processing using brazing technology, extending the industrial chain | Polymer Composite Materials Main Products and Uses | Company | Product | Main Uses | | :--- | :--- | :--- | | Zhaohang Technology | PMI series structural foam materials | Carbon fiber composite material support for aircraft, drones, maglev trains, ships, etc | | Haiwei Composites | Resin-based structural and functional integrated composite materials | Cabin protection, primary/secondary load-bearing structures for ships, achieving lightweight and stealth | | Kobos | Rail transit vibration damping systems, composite material products | High-speed rail, subway vibration damping, cable brackets, synthetic sleepers, etc | Energy Conservation & Environmental Protection Business Main Products and Uses | Company/Division | Product/Business | Main Uses | | :--- | :--- | :--- | | Equipment Division | Composite air-cooled heat exchangers | Heat exchange and cooling in large industrial sectors such as petroleum, chemical, power, and metallurgy | | Zhongdian Jiamei | Industrial and municipal water treatment | Industrial water supply, condensate treatment, wastewater reuse, and municipal water supply, domestic sewage treatment | Core Competitiveness Analysis The company's core competitiveness stems from its clear strategic planning, talent cultivation, strong commitment to technological innovation, and established brand influence in various segmented industries - The company's strategy is clear, its industrial layout is rational, and new materials business has become a new growth point, forming an industrial structure with strong correlation between core technologies and application markets, ensuring sustainable development[78] - The company actively introduces and cultivates high-end talents, has established a comprehensive technical talent management system, and collaborates with multiple universities to build a talent reserve[79] - The company highly values technological innovation, with increasing R&D investment year by year, forming an R&D policy of "producing one generation, developing one generation, reserving one generation," enhancing product competitiveness[80] - Each subsidiary of the group has grown into a leader in its respective segmented industry, with products accelerating import substitution, and overall scale, market share, and brand influence continuously improving[81] Main Business Analysis In 2021, the company's main business achieved steady growth, with operating revenue reaching CNY 2.209 billion and non-recurring net profit increasing by 23.19%, despite a significant decline in operating cash flow due to changes in PPP project accounting Overview of Operations In 2021, the company's overall operating performance entered a period of rapid growth, with both operating revenue and non-recurring net profit increasing by over 20% 2021 Key Operating Data | Indicator | Amount | Year-on-Year Growth | | :--- | :--- | :--- | | Operating Revenue | CNY 2.209 billion | 21.10% | | Non-recurring Net Profit | CNY 233 million | 23.19% | | R&D Investment | CNY 117 million | 11.21% | - The company successfully issued CNY 790 million in convertible bonds, with proceeds primarily invested in new material industrialization projects, providing financial assurance for organic growth and external expansion[99] - The company collaborated with academicians from the Chinese Academy of Sciences, Professor Zengyuan Guo's team from Tsinghua University, and Academician Jilin He's team from Zhengzhou University, deepening industry-university-research cooperation with multiple universities to enhance R&D platform capabilities[90] Revenue and Cost Analysis In 2021, the company's operating revenue reached CNY 2.209 billion, with electronic new materials showing the fastest growth at 34.88%, while overall gross margins were impacted by rising raw material costs 2021 Operating Revenue Composition (by Product) | Product Segment | Operating Revenue (CNY) | Year-on-Year Change | Gross Margin | Gross Margin Change from Previous Year | | :--- | :--- | :--- | :--- | :--- | | Electronic New Materials | 390,238,069.11 | 34.88% | 23.33% | -3.74% | | Polymer Composite Materials | 449,164,057.69 | 9.99% | 43.84% | -1.38% | | Energy Conservation & Environmental Protection Products and Services | 1,369,672,723.55 | 21.69% | 24.34% | -0.68% | 2021 Operating Revenue Composition (by Region) | Region | Operating Revenue (CNY) | Year-on-Year Change | | :--- | :--- | :--- | | East China | 846,100,937.15 | 12.17% | | Central China | 271,908,704.69 | 4.92% | | North China | 266,284,840.96 | 34.19% | | Northwest | 230,191,404.83 | 55.09% | | Southwest | 208,617,842.01 | 54.92% | | South China | 197,231,095.43 | 51.35% | | Northeast | 118,484,921.94 | -23.62% | | Overseas Market | 70,255,103.34 | 77.83% | - Direct materials constitute the largest portion of operating costs, with direct material costs for electronic new materials increasing by 45.48% year-on-year, and contract performance costs for energy conservation and environmental protection products surging by 524.45% year-on-year[109] Expense Analysis In 2021, the company's period expenses increased across the board, with sales expenses rising by 58.81% due to increased sales efforts and financial expenses growing by 40.88% due to convertible bond interest recognition 2021 Period Expenses (Unit: CNY) | Expense Item | 2021 | 2020 | Year-on-Year Change | Main Reasons for Change | | :--- | :--- | :--- | :--- | :--- | | Sales Expenses | 78,155,354.14 | 49,212,772.87 | 58.81% | Due to increased sales efforts | | Administrative Expenses | 126,289,793.94 | 109,874,651.29 | 14.94% | - | | Financial Expenses | 28,732,656.39 | 20,395,753.18 | 40.88% | Due to recognition of convertible corporate bond interest | | R&D Expenses | 97,119,132.55 | 87,043,211.94 | 11.58% | - | R&D Investment In 2021, the company's R&D investment reached CNY 117.09 million, representing 5.30% of operating revenue, with a growing R&D team focused on key projects to enhance technological capabilities and market expansion R&D Investment Over the Past Three Years | Indicator | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | R&D Investment Amount (CNY) | 117,087,325.04 | 105,284,423.76 | 92,577,838.99 | | R&D Investment as % of Operating Revenue | 5.30% | 5.77% | 4.94% | - The number of company R&D personnel increased from 323 to 370, a 14.55% year-on-year increase, with master's degree holders increasing by 63.41%[121] - Key R&D projects include high-purity silver alloy targets for AMOLED (aiming to break foreign monopoly), high-quality ITO targets for photovoltaics (providing new market space for the company), and high-strength synthetic sleepers for national railways[116][118][121] Cash Flow Analysis In 2021, the company's net cash flow from operating activities significantly decreased by 89.46% due to PPP project-related expenditures, while financing cash flow substantially increased by 148.73% from increased borrowings 2021 Cash Flow Statement Key Items (Unit: CNY) | Item | 2021 | 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 23,516,229.43 | 223,153,080.66 | -89.46% | | Net Cash Flow from Investing Activities | -335,166,813.70 | -528,717,592.26 | 36.61% | | Net Cash Flow from Financing Activities | 724,434,585.94 | 291,256,494.69 | 148.73% | | Net Increase in Cash and Cash Equivalents | 412,578,670.02 | -14,712,006.70 | 2,904.37% | - The significant decrease in net cash flow from operating activities was primarily due to the reclassification of PPP project construction-related expenditures as operating cash flow, in accordance with "Interpretation No. 14 of Accounting Standards for Business Enterprises"[130] Analysis of Assets and Liabilities As of the end of 2021, the company's total assets grew to CNY 6.288 billion, with a notable increase in contract assets and long-term borrowings, while CNY 494 million of assets were restricted - Contract assets significantly increased from CNY 68 million at the beginning of the year to CNY 322 million, with their proportion of total assets rising from 1.30% to 5.12%[130] - Long-term borrowings significantly increased from CNY 41.07 million at the beginning of the year to CNY 315 million, with their proportion of total assets rising from 0.78% to 5.02%[130] - As of the end of the reporting period, the total amount of assets with restricted ownership or use rights was CNY 494 million, primarily including deposits, pledged notes, mortgaged fixed assets and intangible assets, and pledged large-denomination certificates of deposit[135][136] Investment Analysis In 2021, the company's investment decreased by 47.04% to CNY 259 million, with the most significant capital operation being the issuance of CNY 787 million in convertible bonds for new materials projects and working capital replenishment Use of Raised Funds (Unit: CNY 10,000) | Committed Investment Project | Total Committed Investment of Raised Funds | Amount Invested in Current Period | Cumulative Amount Invested as of Period End | Investment Progress | | :--- | :--- | :--- | :--- | :--- | | New High-Performance Structural/Functional Materials Industrialization Project | 55,024.19 | 6,965.96 | 6,965.96 | 12.66% | | Replenishment of Working Capital | 23,655.95 | 23,655.95 | 23,655.95 | 100.00% | | Total | 78,680.14 | 30,621.91 | 30,621.91 | - | - The company completed the issuance of convertible bonds in August 2021, with net proceeds of CNY 787 million[141] - The construction progress of the raised fund investment project is slow (12.66%), mainly due to the impact of the epidemic in the second half of 2021, which caused customer bidding to be delayed or suspended, leading to the company's expansion plan not meeting expectations[144] Analysis of Major Holding and Participating Companies In 2021, all major subsidiaries achieved profitability, with Luoyang Kobos New Material Technology Co., Ltd. reporting the highest net profit of CNY 44.97 million, contributing significantly to the company's overall earnings 2021 Operating Performance of Major Subsidiaries (Unit: CNY) | Company Name | Operating Revenue | Operating Profit | Net Profit | | :--- | :--- | :--- | :--- | | Luoyang Kobos New Material Technology Co., Ltd. | 232,886,265.32 | 52,155,997.54 | 44,972,042.42 | | Beijing Zhongdian Jiamei Environmental Protection Technology Co., Ltd. | 401,234,385.78 | 40,803,794.21 | 36,117,011.55 | | Xianning Haiwei Composite Materials Products Co., Ltd. | 258,621,788.12 | 39,962,919.85 | 35,344,268.29 | | Hunan Zhaohang Material Technology Co., Ltd. | 85,992,163.19 | 38,594,722.43 | 33,884,393.39 | | Luoyang Gaoxin Sifang Electronic Materials Co., Ltd. | 284,075,331.04 | 35,032,304.16 | 31,997,903.12 | Outlook for Company's Future Development The company plans to pursue high-quality sustainable development by strengthening existing businesses, increasing R&D investment, optimizing management, and enhancing talent development, while actively addressing identified risks - Key tasks for 2022 include clarifying scientific research paths, recruiting global technology partners, optimizing management systems, improving service quality, ensuring production efficiency, and strengthening talent teams[160][162][166][171][172][175] - The company faces risks including macroeconomic fluctuations, internal management needing improvement, intensified market competition, and bad debt risk from increasing accounts receivable[177][183][184][185] - To mitigate risks, the company will strengthen existing businesses, actively cultivate new material businesses, build a diversified industrial structure, and enhance customer credit management and accounts receivable collection[184][185] Corporate Governance This section details the company's governance structure, including its compliance with regulations, the composition and compensation of its board and management, and its profit distribution and incentive policies Overview of Corporate Governance During the reporting period, the company continuously improved its corporate governance structure in strict accordance with relevant laws and regulations, maintaining independence from its controlling shareholder in all key aspects - The company's governance structure, comprising the General Meeting of Shareholders, Board of Directors, Supervisory Board, and management, along with specialized committees, operates in compliance with regulatory requirements[189] - The company maintains complete independence from its controlling shareholder in terms of business, personnel, assets, organization, and finance, possessing full autonomous operational capabilities[190] Information on Directors, Supervisors, and Senior Management This chapter outlines the basic information, professional experience, shareholding changes, and remuneration of the company's directors, supervisors, and senior management, noting board and supervisory board re-elections during the period - On December 1, 2021, the company completed the re-election of its Board of Directors and Supervisory Board, leading to the departure of some directors (Sun Jianke, Xi Shenyang, etc.) and supervisors (Wang Bin)[201] 2021 Remuneration of Selected Directors, Supervisors, and Senior Management (Unit: CNY 10,000) | Name | Position | Total Pre-tax Remuneration from Company | | :--- | :--- | :--- | | Li Zhanming | Chairman | 100 | | Liu Yufeng | General Manager | 103.38 | | Li Jiangwen | Director, Deputy General Manager | 100 | | Zhang Yuanyuan | Deputy General Manager, Board Secretary | 90 | | Duan Jiagang | Deputy General Manager, Financial Controller | 90 | | Sun Jianke | Vice Chairman, General Manager (Departed) | 300 | Profit Distribution Policy The company strictly adhered to its profit distribution policy during the reporting period, proposing a cash dividend of CNY 0.35 per 10 shares for 2021, totaling CNY 31.65 million 2021 Profit Distribution Plan | Item | Amount/Plan | | :--- | :--- | | Dividend per 10 shares (CNY) (including tax) | 0.35 | | Cash dividend amount (CNY) (including tax) | 31,647,744.21 | | Distributable profit (CNY) | 629,792,998.20 | | Proportion of total cash dividend to total profit distribution | 100.00% | Implementation of Equity Incentive Plans During the reporting period, the company continued to implement its 2018 restricted stock incentive plan, repurchasing some shares due to employee departures and completing the third unlocking period for eligible grantees - The company completed the unlocking of the third restricted period for the initial grant portion of the 2018 restricted stock incentive plan, involving 10.956 million shares for 252 incentive recipients, which became tradable on June 30, 2021[247] - The company completed the unlocking of the third restricted period for the reserved grant portion of the 2018 restricted stock incentive plan, involving 1.716 million shares for 3 incentive recipients, which became tradable on October 27, 2021[248] Environmental and Social Responsibility This section outlines the company's commitment to environmental protection and its efforts in fulfilling social responsibilities towards shareholders, employees, and the community Environmental Protection The company and its subsidiaries are not classified as key pollutant-discharging entities and received no environmental administrative penalties during the reporting period, maintaining stable compliance with pollutant discharge standards - The company and its subsidiaries are not classified as key pollutant-discharging entities and received no environmental administrative penalties during the reporting period[262] Social Responsibility The company actively fulfills its social responsibilities by protecting shareholder and creditor rights, safeguarding employee interests, maintaining supplier and customer relationships, and contributing to rural revitalization - The company prioritizes protecting the rights and interests of shareholders and creditors through standardized corporate governance, effective investor communication channels, and continuous profit distribution[264][267] - The company strictly adheres to the "Labor Law," providing social insurance and housing provident fund contributions for employees to safeguard their legitimate rights and interests[268] - The company actively responds to national calls, contributing to rural revitalization through initiatives such as purchasing agricultural products from impoverished areas and organizing "caring for education" activities[270] Significant Matters This section details the company's fulfillment of commitments, significant contracts, and major events concerning its subsidiaries during the reporting period Fulfillment of Commitments During the reporting period, the company and relevant parties strictly fulfilled all commitments, including the completion of the performance pledge for the acquisition of Kobos, which exceeded its target - The company and its actual controllers, along with other committed parties, strictly fulfilled all commitments during the reporting period, including share lock-up, avoidance of horizontal competition, and measures to compensate for immediate returns[276][278][280] - The performance commitment for the acquisition of Kobos (Luoyang Kobos New Material Technology Co., Ltd.) has been fulfilled, with cumulative net profit of CNY 95.06 million for 2019-2021, exceeding the committed target of CNY 90 million[282][291] Significant Contracts and Their Performance During the reporting period, the company had no significant entrustment or contracting matters, provided guarantees solely for its subsidiaries totaling CNY 374.17 million, and invested CNY 653.83 million in bank wealth management products Guarantees for Subsidiaries (Unit: CNY 10,000) | Guarantee Type | Total Approved Guarantee Amount in Reporting Period | Total Actual Guarantee Balance at Period End | | :--- | :--- | :--- | | Guarantees for Subsidiaries | 79,000 | 37,417 | Entrusted Wealth Management (Unit: CNY 10,000) | Source of Funds | Amount of Entrusted Wealth Management | Unmatured Balance | | :--- | :--- | :--- | | Own Funds | 16,132 | 4,100.93 | | Raised Funds | 49,251.38 | 0 | Significant Matters of Subsidiaries During the reporting period, the company expanded its business through subsidiaries, with Sifang Electronic establishing two new holding subsidiaries and Zhongdian Jiamei acquiring Luoyang Fangshi Technology Co., Ltd - Subsidiary Sifang Electronic established two new holding subsidiaries: Luoyang Sifang Special Materials Technology Co., Ltd. (51% stake) and Luoyang Sifang Vacuum Technology Co., Ltd. (71% stake)[337] - Subsidiary Zhongdian Jiamei acquired 100% equity of Luoyang Fangshi Technology Co., Ltd. for zero consideration[337] Changes in Shares and Shareholder Information This section details changes in the company's share capital and provides an overview of its shareholders and actual controllers Changes in Share Capital During the reporting period, the company's total share capital decreased by 172,000 shares to 914,221,304 shares due to the repurchase and cancellation of restricted shares from ineligible incentive recipients - Due to the repurchase and cancellation of 172,000 restricted shares from 11 departed incentive recipients, the company's total share capital decreased from 914.4 million shares to 914.2 million shares[341] Shareholder and Actual Controller Information As of the end of 2021, the company had 43,979 common shareholders, with the Li brothers (Li Zhanming, Li Zhanqiang, Li Mingqiang, Li Mingwei) acting in concert as the actual controllers, holding a combined 21.52% stake Top Five Shareholders' Shareholding | Shareholder Name | Shareholding Percentage | Number of Shares Held at Period End | | :--- | :--- | :--- | | Li Zhanming | 10.45% | 95,501,092 | | General Technology Group Investment Management Co., Ltd. | 9.47% | 86,600,000 | | Li Mingqiang | 4.36% | 39,841,600 | | Li Zhanqiang | 4.16% | 37,988,400 | | Li Mingwei | 2.55% | 23,300,000 | - The company's controlling shareholders and actual controllers are the four brothers: Li Zhanming, Li Zhanqiang, Li Mingqiang, and Li Mingwei, who constitute parties acting in concert[354][360] Bond-Related Information This section provides details on the company's convertible corporate bonds, including issuance, holding structure, and credit rating Convertible Corporate Bonds The company issued CNY 799 million in convertible bonds in July 2021, which had not yet entered the conversion period by the end of the reporting period, and maintained a stable AA- credit rating - The company issued convertible corporate bonds totaling CNY 799 million on July 30, 2021, with a term of 6 years, abbreviated as "Longhua Convertible Bond" and code "123120"[347] Top Five Convertible Bond Holders | Holder Name | Holding Percentage | | :--- | :--- | | Li Zhanming | 10.56% | | General Technology Group Investment Management Co., Ltd. | 9.58% | | Guoshou Pension Stable No. 5 | 4.93% | | Li Mingqiang | 4.41% | | Li Zhanqiang | 4.20% | - Rating agency Golden Credit Rating International maintained the company's corporate credit rating at AA- with a stable outlook[378] Financial Report This section presents the company's audited financial statements, including the audit report, balance sheet, income statement, and notes on significant accounting policies and financial statement items Audit Report Lixin Certified Public Accountants (Special General Partnership) issued a standard unqualified audit opinion on the company's 2021 financial statements, confirming their fair presentation in all material respects, with key audit matters being revenue recognition and goodwill impairment Audit Report Key Information | Item | Content | | :--- | :--- | | Type of Audit Opinion | Standard Unqualified Opinion | | Name of Audit Firm | Lixin Certified Public Accountants (Special General Partnership) | | Key Audit Matters | 1. Recognition of main business revenue
2. Goodwill impairment | Financial Statements The financial statements show the company's total assets increased to CNY 6.288 billion, total liabilities to CNY 2.965 billion, with an asset-liability ratio of 47.15%, and a net profit attributable to parent company shareholders of CNY 290.89 million Consolidated Balance Sheet Key Items (Unit: CNY) | Item | 2021-12-31 | 2020-12-31 | | :--- | :--- | :--- | | Total Assets | 6,288,325,043.23 | 5,264,425,048.25 | | Total Liabilities | 2,964,992,854.24 | 2,413,444,439.10 | | Total Equity Attributable to Parent Company Owners | 3,117,387,177.08 | 2,672,892,493.85 | Consolidated Income Statement Key Items (Unit: CNY) | Item | 2021 Annual | 2020 Annual | | :--- | :--- | :--- | | Total Operating Revenue | 2,209,074,850.35 | 1,824,187,516.39 | | Operating Profit | 338,133,883.86 | 291,106,172.78 | | Total Profit | 336,930,688.40 | 283,731,904.48 | | Net Profit | 307,190,192.24 | 252,100,371.60 | | Net Profit Attributable to Parent Company Shareholders | 290,894,734.78 | 222,255,290.14 | Significant Accounting Policies and Accounting Estimates Changes During the reporting period, the company adopted revised accounting standards for leases and an interpretation for PPP project contracts, leading to the recognition of right-of-use assets and lease liabilities, and an adjustment to retained earnings - Effective January 1, 2021, the company adopted the new lease standard, retrospectively adjusting operating leases prior to the initial adoption date, recognizing right-of-use assets and lease liabilities[639][640] - The company implemented "Interpretation No. 14 of Accounting Standards for Business Enterprises," adjusting the accounting treatment for PPP project contracts, which resulted in an increase of CNY 9.98 million in retained earnings at the beginning of the year[644] Notes to Consolidated Financial Statement Items This chapter provides detailed explanations for various items in the consolidated financial statements, including goodwill, accounts receivable, inventory, guarantees, and the accounting treatment of convertible bonds - As of the end of 2021, the carrying amount of goodwill was CNY 649 million, with no new impairment recognized during the period[786][787][790] - At period-end, the book balance of accounts receivable was CNY 1.195 billion, with a provision for bad debts of CNY 214 million, resulting in a carrying value of CNY 980 million; the top five debtors accounted for 16.47% of the total accounts receivable[696][708] - The issuance of convertible corporate bonds resulted in the recognition of CNY 671 million as "bonds payable" under liabilities and CNY 133 million as "other equity instruments" under owners' equity[849][853][871]